Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Tuesday, Dec. 17:
Tech firms seen driving Hong Kong IPOs next year
Companies in the technology and internet fields are expected to be key players in Hong Kong’s initial public offering activities next year, given the favorable sentiment in the city, said Ringo Choi, Asia-Pacific IPO leader at Ernst & Young LLP. A total of HK$180 billion (US$23.21 billion) could be raised during the year in the whole IPO market, compared to an estimated HK$162 billion this year. The controversial issues regarding the shareholdings and controlling voting rights of Alibaba Group Holding Ltd. may be resolved in the best interests of the public, prompting the multimedia giant to float its shares in Hong Kong, Choi added.
Hong Kong listing authority urged to find way to welcome Alibaba
Interview: Hong Kong should seek ways to allow Alibaba Group Holding Ltd. to list in the city and help the local bourse stay competitive against the New York Stock Exchange and NASDAQ Stock Market, said Pamela Chung, managing director of Computershare Hong Kong Investor Services Ltd. Chung suggested that the listing committee under Hong Kong Exchanges and Clearing Ltd. (00388.HK) should show some discretion on Alibaba. If the company chooses to list in the city, public shareholders of Alibaba can vote on whether or not to authorize the company management to nominate directors, without compromising the one share one vote principle.
2014 INVESTMENT OUTLOOK
US stocks seen staying upbeat
Interview: Stock markets in the United States are expected to climb about 10 percent next year, after a surge of about 20 to 33 percent in various indices this year, said fund manager Bill Miller at Legg Mason Capital Management Inc. A fair valuation with an average dividend ratio surpassing the coupon rate of 5-year Treasury is one of the major factors supporting the market performance, Miller said, adding that the expected growth in corporate income in the coming few years should be enough to drive up dividend payouts at a double-digit growth rate.
Japan stock market remains attractive
Interview: Japan is likely to remain an attractive market for investment next year, given a low valuation and rising income growth of Japanese companies, said director and portfolio manager Robert Weatherston at BlackRock Inc. A relatively large inflow of funds is expected to tap into the market, which has absorbed a record US$125 billion of capital this year. Counters in the financial sector, infrastructure, real estate and retail are among the top picks.
US pharmaceutical counters to thrive on Obamacare
Interview: Pharmaceutical plays in the United States are seen benefiting from the Obamacare scheme over the long term amid a wider safety net in medicare, said Franklin Templeton Investments fund manager Evan McCulloch. An average rise of 10 to 20 percent in the share prices of the counters is possible while the income of major players, including Amgen, Gilead Sciences, Celgene and Biogen IDEC, will get a big boost even in the short term, McCulloch said, adding that other smaller drug makers can also witness higher income growth in the longer term.
Occupy Central movement may spur independence calls, Elsie Leung warns
Basic Law Committee vice-chairman Elsie Leung has warned that some people may emulate the civil disobedience Occupy Central campaign to demand independence for Hong Kong if the unlawful act is allowed. Leung, also a former justice secretary, said the blockade movement might get out of control, resulting in violence as what happened when a group of South Korean farmers staged a protest when the World Trade Organization held a conference in the city in 2006. She doubted the ability of the campaign organizers to manage the protestors.
Henry Tang rules himself out of 2017 chief executive race, backs Antony Leung
Former chief secretary Henry Tang, who lost in the 2012 chief executive election, said he would not stand for the 2017 contest for the top post. But he gave backing to former financial secretary Antony Leung, whom he described as a capable person with commitment to serve the people. Referring to Leung’s resignation amid a controversy over his purchase of a luxury car before the introduction of car tax hike, Tang said Leung had apologized and paid a price for his mistake. He believes the pubic will forgive Leung’s mistake.
Ireland quits relief net, but eurozone crisis still unresolved
After three years of financial assistance from the International Monetary Fund, Ireland has withdrawn from the economic relief plan, marking a new phase in the easing of the euro debt crisis. However, one should not be overly optimistic on the future prospects of Europe. Although the December purchasing managers index of eurozone rose, the PMI figure in France dropped to 47, below the 50-point line that differentiates expansion and contraction. The widening disparity among eurozone countries is not conducive to the integration and harmonious development of the region.
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